The major indexes fell hard this morning after Fed Chairman Ben Bernanke used a slightly different tone about the economy, expressing some surprise about the speed of recovery in the labor market.
That’s making investors less confident in the possibility that the Fed will undergo a new round of quantitative easing, the elusive dream known as QE3. Bernanke’s comments sent the Dow down about 30 points; both the Dow and S&P 500 were recently off by about 0.2%. Gold also fell.
Earlier this morning, markets had risen on news that European banks had tapped an ECB fund for 529 billion Euros.
That said, Bernanke still sounded glum about the labor market. And he isn’t apparently very worried about the inflation rate, expecting it to stay low in the longer term despite the recent uptick in gas prices.
There was also a selloff in the Treasury market this morning, which may have been spurred by a single trader selling futures. The selloff, however, was short-lived and yields on the 10-Year note were recently up just 3 basis points.
